#e-minis

welcome to this fourth in the series on treaty market cycles today I'm going to use an example trading es futures cycles but this applies equally well to the forex market day trading swing trading stock market futures whatever you're trading because it really has to do with the way that markets move through time now in the past we talked about other types of cycles such as seasonal cycles or calendar cycles expansion volatility cycles and then we also talked about the chaos and the orderly cycle today I'm going to look at price action a very practical thing that is very important for you understand reading pure price action so let's take a look at what we're talking about here when it comes to cycles and price action this is very very important to understand now we have a trend alrighty so let me bring up a I've already got some markings there as you can see but let me bring up my drawing tool and I'll use a different color here to make it stand out so I'll choose green and so we're looking at this up cycle or this uptrend here now in an uptrend we want to make sure and we can just get any highlight with some yellow here so it doesn't get too messy but enough trends we want markets to move up in price and in time and what that means is that we are using both time and price in fact WD Gann was famous for teaching this the confluence of time and price so when you're in an up cycle it's not just about higher highs and higher lows that has to do with price and so that's fine that's half of the equation but what people rarely talk about is the element of time in a higher high and higher low so that's what we're going to talk about right now so when we have an uptrend like this what we've got is yeah let me see the best way to let me just take that off of there again since I've already got some markings here I want to make this as clear possible so here is a full well here's your half cycle from a low to a high that's a half cycle and then from a high to a low that's another half cycle so your full cycle will be from the load to the load that is your full cycle and then it moves up from there and we started a new cycle there's a new half cycle so that's what I'm talking about when we're talking about these up/down cycles market moving up markets moving down all right now when we're in an uptrend we want to see two things in other words this helps you the practical application of this is to determine whether the market is going to continue or hey we all know the trend is your friend until the end so if that trends not going to continue we want to wave identifying that so in an uptrend we want and we can just I'll do it this way here so the range of the price going up should be greater than the range of the price coming down in the down cycle and that just has to do with price when it comes down it's covering that much range when it went up it covered that much range in price all right so pretty intuitive right and this is what most people understand and got it so I won't talk about that too much but now what I wanted to talk about is time we also want to add the time element so in this half cycle we want from the low to the high okay there's our time we want that time to be greater I'm going to put a little space there just to distinguish this from the time of the market goes from the high to the low again in an up cycle so bring my arrow in here let's see if I can work oh I see I'm going off the chart a little bit hit concede now have to chop it off the screen so again that period of time as it goes up should be longer a longer period of time then when it comes down so it's not just that it covers more price range that's half of it yes that is half of it but if you want the truth the whole truth and nothing but the not just half the truth you also have to look at how much time it spends coming down relative to how much time it spent going up now this is called rate translations if you want to get really into some specifics and technical analysis here and I find unfortunately that this is not taught very often anymore which is sad because it's actually really helpful so what Ray translation means is if we look at this whole cycle okay again really it's there that we put in our low or do we put it in there no actually the low comes in right about there and the high is up there okay so there's our full cycle now if we were to look and I'm just gonna approximate this the halfway point between the low and the low alright so in other words from this low – that low where is the halfway part is it at this blue line no that is to the right of the midpoint so again I'm not gonna measure this exactly but you'll get the idea so let's say I'm just gonna eyeball it here that this is the middle node which if we were to take this Square and cut it in half that is your midpoint right there right that's your midpoint now if the high comes in to the right of that midpoint that is what's called right translation and essentially that's another way of measuring what I was just talking about that the market has spent more time going up than it has been going down all right but there's an official term for it now if the market made its high over to the left to the left of the midpoint let's say it went there and then it spent all this time coming down that's called left translation it came in to the left of the mid point between the low and the low and then that would be called left translation that's not as strong of a signal for it to continue going up because hey again talking about practical trading and not just theory here that's what we're dealing with we're dealing with the issue of okay I'm going to take a trade I'm looking to go along but I got to trade the hard right edge of the screen so do I have a high probability of this thing continuing to go in an uptrend after I get in if this is one way that can help determine that so the dynamic behind it by the way it's not just charting or geometry or theory there is actual practicality behind this the and what it means is that you're getting a very strong impulse move when this happens so it goes up very fast in a short period of time and the way that affects the market participants psychologically is they feel like oh gosh I've missed out on this move we had a big impulse move boom and I got left behind so that's part of the mass psychology that's going on that discourages people from coming in and buying after that event another very practical aspect of this is those big moves that have been in a very short period of time or often caused by news events gossip rumors news sometimes that's you know fake news but anyway the point is that the market is reacting emotionally in a very quick knee-jerk reaction and it may then very well say oh okay that deal is done that news is over with the money was made on that news or later on they could be just minutes later they say oh that wasn't real news okay that was just a piece of gossip a rumor or because the markets respond to news so quickly they might then you value a tat see what news comes out they usually just read the headline and they'll say oh that's exciting and then after the news comes out and they've taken their trade the initial trade at least then they read you know paragraph one paragraph 2 paragraph 3 but they don't take the time to do that when the news first comes out and then they read all the qualifiers of that news and they're like oh well the headline sounded good but now that I read all the details hmm I guess it's not as good as I thought after all so these are the kind of dynamics that happen this is the reality behind the price pattern and then when people think these things of course they're less likely to follow through so that's what the price means in practical terms all right let's get that off of there and they got one little extra slide here for you so there's a tool now you can do this with just eyeballing it and getting to understand price patterns and kind of get these ingrained in your brain cells through repetition and that's totally cool I actually prefer to use tools that are objective mathematically so that I don't have to depend on my discretionary evaluation and then we have a tool that's mathematically based then you have an objective evaluation but you also have a mathematical one that you could create rules with so that well then you can build a rule-based system which I think it's very very important so I've got a cycle indicator that I use it actually catches every single cycle high and low with amazing precision it's very accurate and identifying the final high and low so you don't get stopped out so often after your entry and it's not an indicator that I sell in fact it's not even a proprietary indicator quite frankly it's an indicator that is already on your charting platforms so in fact it's one of the most common indicators that is on charting platforms but it wasn't designed as a cycle indicator it wasn't designed to time market so I modifier they just go into the parameters with the inputs and we modify a few of the inputs and we turn it into a cycle indicator so if you're interested in that it takes about an hour for me to help you get it set up in your charts and then to give you a tutorial on how to treat it because frankly it's very counterintuitive how to trade it and a lot of people look at it and say oh this doesn't work until I show you oh okay here the powder and you trade here are the triggers and so forth and then in fact I just had a gentleman write me the other day was already a professional trader and said wow thank you so much for this it's already improved my trading even though I was making money so I offer this absolutely free no charge whatsoever just join me on the webinar depending on when you watch this video the free webinar may or may not still be available since things last here on YouTube for years but anyway just in email– birria top doctrine e-comm if you're interested and we'll send you an invitation to this if it is still available I love doing these videos for you please go ahead and leave a comment below let me know if you like the videos and give us a thumbs up share the video below if you would really appreciate that all good things sounds good to share good things right share good things with good people and I'd love to help you in any way that I can oh another thing that I have for free right now is I'm giving away one of my trading courses and this is an actual course with videos and there's five videos in it so it's just a little mini course but in it I share with you some very very practical things you can actually incorporate into your trading including my rubberband trade and this rubberband trade is a complete trade sup that I'll teach you in my intent is hopefully you can start making money with it without having to spend any money with me or anybody else and yeah I love to get you making money first before you make any kind of investment and obviously do it on paper or simulator trading before but I give you all the entries the exits the rules all that stuff absolutely free just click that little icon in the top right hand corner of the video or if you're not watching on YouTube then there's a link below or an opt-in form on the side what you do that I'll send you a link to the course with my rubberband trade strategy [Music] you

welcome to part three of our series on market cycles this one were titling Forex i coals trading but it also applies to stocks futures Forex really pretty much any type of market so let's jump right into it because this one I'm very excited to share with you this is one of those cycles that has rarely talked about in fact I hardly hear anyone talk about this and yet it is one of the most important so we have talked about calendar cycles and we have talked about high volatility low volatility cycles well this one is what I call my order chaos cycle theory and it basically means this well let's start out with a little example here of where this comes from and how it all ties together so first of all there's one theory that the market is a random walk in other words chaotic random and you've probably heard of the book random walk down Wall Street if you haven't even read it so it's very popular book very well thought out very well researched and it is a good book and there's a lot of truth to it so basically the author said that everything that can be known about our bond market is already known and therefore the markets are already perfectly efficient and if we can't get image and trading we're in investing okay so that's one theory another theory is exactly the opposite and these people say oh no the market is perfectly orderly and predictable and they'll often use mathematical models often geometrical models and here you're getting into schools of thought such as Gann probably the most famous and some followers and people who followed up with this work and maybe altered it a little bit and basically saying oh we can predict the market five years out ten years out 20 years out to the exact day time and price so two completely opposing point of views and some of them even have some history to back up some predictions that they've made out into the future which were pretty darn accurate so obviously I've read both of these positions and when you read each one then each one seems very convincing they show a lot of examples and you could say yep that worked – that made sense but then when it get done reading both sides of the research you're stumped because they're completely and utterly contradictory so as I was doing this I realized wait a minute as I'm looking at these examples yes they both have examples of that support to their positions so there might be an issue here where sometimes the market is a total random walk in other times when it is very orderly and predictable and so I came up with this idea that there is a cycle in the market another type of cycle where markets go through a period of being orderly and then they go into another period of time where they become very chaotic while they're chaotic they are unpredictable and you cannot establish a probability scenario and therefore you should not be trading them on the other hand the times we do want to trade is when the markets are very orderly and then we can provide a probability scenario so this is why over trading is one of the cardinal sins is because people can trade for a while maybe you've had this experience where you've traded a methodology and it's worked for a little while and then all of a sudden it seems like it stops working one of the reasons for that may be that while you're trading it the murders or the market is in an orderly cycle and then it goes into a chaotic cycle and so yeah your probability scenario goes away just because the market is in a random walk during that time and nobody's taught you about – these cycles so if you're trading during both cycles then that is the well and you're gonna be over trading because you shouldn't only be trading during orderly times and so this is the foundation of a waiting for what I do I wait for the alignment of what I call five energies in the market so that's the question well how do we determine now when we have an orderly cycle when is the market moving in a rather systematic orderly I don't like to use the word predictable by the way because that assigns too much a certainty what we're doing but a probability which is really all we need all we need to explain that probability over a large period of time is what makes us money so here's how I determine an orderly cycle I'm looking for the energies in the charts now by energy I mean the energy of money money flow buying selling buying pressure selling pressure volume the speed of the orders and things like this so I break the energy of the market down into five subsets now you could add more to this but here are five and these five are important and I'll show you why in a moment but first let me just give you the less so step one in my trading method is trend and I always trade by going right through this checklist really it's just a checklist start with step 1 okay what's the trend good place to start because I want to know which side of the market I should be on long or short number two trend is not enough a lot of people think oh you just to trade with the trend no no no no no no there are two types of trends strong trends and weak trends a lot of people have never been taught that again that is a huge vacuum in your knowledge of trading and you will lose money unless you learn how to determine whether the market has momentum behind it because momentum is strength and if a trend is weak it will fail it will fail the trend is your friend until the end and you would be getting in at the end so you must always ask yourself a question in effect I'd encourage you to write this down even put it on post-it note and put it on your monitors and here's the question is this a strong trend or a tweaked random and ask yourself that question every time before you take a trade step number three psych goal so now that we have a trend and it's strong then we go to step three but only if we have step one and two in place now we say okay now when do I want to get in I want to buy the final cycle low so the market doesn't make another low after I bought in other words I don't want to get stopped out oh by the way that's where my cycle indicator comes in which I did get away for free I offer it through a live webinar at least at the time of this recording I'm still offering that for free and it takes about an hour to explain it and not only how to get it set up in your chart but how to trade it so we modify a indicator that's already in your charts to turn it into a cycle indicator and then I show you how to trade it which is very frankly counterintuitive that's why we do it on a tutorial on a webinar like that okay so if you want that just send me an e-mail birria top trading calm and like I say if it's still available whenever you rate will let you know the date and time of the next webinar it's all for free one hour of free training now step four then okay we got a trend it's strong we've got the time to get and we just want to make sure that we're buying at a support level or shorting at a resistance level and that's all on the short term chart then number five they look at the longer-term timeframe and I want to make sure I'm treating in the direction of the strength with the momentum of that longer time frame not trend I don't care what the trend on the longer time frame is couldn't give a mouse is left patootie so that's one of the heresies traditional technical analysis that I violate it's not the only one by the way but hey if you're making money with traditional technical analysis god bless you in the horseshoe Rudy Nam most people aren't and by the way there's a reason for that it's not that it's no good it's just that the markets have changed since those rules were written so now Marcus move very differently basically because of technology computerized trading algo trading commoditization of retail traders direct access high-frequency trading all this stuff has dramatically changed the way markets move since the establishment of traditional technical analysis so you've gotta keep up with the times so trend on the longer timeframe no longer means anything used to work no more so I wait for the alignment of these five energies now here's the key as I measure these we're going to use indicators not because indicators are any kind of magic they're not magical they're just mathematical but I use them because being mathematical they give me objective measurements so that I don't have to be a discretionary trader and indicators themselves don't make us money right they do what they promised they well the answers in the question they indicate so but they do give us an exact value so that our energies or the measurement of those energies is objective rule-based and duplicate ball so when I share this with people they can do it as well it's not just that oh I'm good or I've got some you know magic skill or something so here's the bottom line on how this all then creates a probability scenario at each point I'm looking to possibly take a trait I simply ask myself how many of those five energies are aligned and give each setup a score of one to five now the higher the score of course the higher the probability of success so I like to mist you taking each trait to court but here's the key these particular five energies were a strategically chosen because they are independent and uncorrelated to each other that's why these five energies as I said in passing earlier you can use more than these five energies of money flow there are other ones but these five are special because they are very uncorrelated to each other and that's what makes it significant when they're all bullish or bearish that gives you a preponderance of the evidence and gives you a probability scenario so that's when we then say oh now we have an orderly cycle in the market we're in an orderly time market is moving in an orderly manner we still have to use our stops we still have to hedge our positions because anything can happen at any time news rumor gossip HEC computer glitches whatever right but that's okay because we can survive those as long as we use good risk management money management but this is how I establish a probability scenario by finding cycles that are in a time of moving in an orderly way that gives me a probability scenario so if you like this video please understand then yep it's free but if you got value from it then you should pay that value forward and the best way to do that is click the your button below if you're watching on to YouTube please subscribe you'll get notified every time I release a new tutorial which is about every week click the thumbs up icon and leave a comment I really love your comments I've got a special offer for you if you'd like to learn more details about the five energy Matt that I had to go through real quick about 10 minutes here today so obviously you can't go into all the details I just want to give you the overview so you get the concepts but you can get all the details of it the best place to start is to start for free with me and just get my rubber band trade and I give that trade away it's absolutely free tells you where to get in and out and where place your stops all that stuff is a very high win-loss ratio and I want you to start making money immediately without having to pay me anything so this video is about 26 minutes you get my rubber band trade strategy absolutely free by clicking on the image in the top right corner of this video or in the description below the video or if you happen to find this video somewhere other than YouTube there's probably a link below or an opt-in form on the side and once you do that I'll personally email the video to you with the rubber band trade strategy [Music] you

See this recent article on my main blog dedicated to day trading e-mini futures for what I mean.